About the compendium

Almost every successful company recognizes that it is in the business of customer experience. Many businesses understand that it’s no longer enough to compete on products and services; how a company delivers for its customers is beginning to be as important as what it delivers.Customers—whether they’re airline passengers, online retail consumers, or IT-services outsourcers—not only increasingly dictate the rules but also expect high levels of satisfaction from the savviest practitioners and the sleepiest industry participants alike. Companies that work to master this dynamic become superior competitors.As leaders of McKinsey’s Customer Experience Service Line, we are delighted to present this first volume of Customer experience: Creating value through transforming customer journeys. The compendium represents the collective thinking of our experts and practitioners, developed through years of working with customer-experience leaders around the world. Our experience teaches us that the best customer-experience efforts begin with a “customer back” perspective driven by the customer’s wants, not a company’s traditional organizational structure. That makes the task of organizing and governing customer experience unique even among organizational designs that rely on cross-functional collaboration. The articles in this volume explore the critical elements of an effective customer-centric strategy, which can deliver benefits to customers, employees, and the bottom line. These include the central role of customer journeys, rather than touch-points, in organizing and measuring improvement efforts; the importance of establishing a vision to bridge the gap between board direction and front-line engagement; the key role of measurement systems that allow a company to hear the voice of its customers; and the essential link between customer experience and value creation that can elude even the best-intentioned efforts. Hope this volume enriches your understanding of the benefits of improving customer experience and spurs creative thinking about ways to overcome challenges in the process.

What do my customers want?

This is the question that every executive asks and that the savviest executives are asking more frequently than ever.Technology has handed customers unprecedented control over the experience of purchasing goods and services. The process increasingly plays out in fluid, hypercompetitive, and alwayson markets with many channels and touchpoints, or individual interactions.More and more, customers expect the levels of satisfaction they receive from leaders such as Amazon, Apple, and Google—and they expect this from even the sleepiest corners of markets across all industries.Meanwhile, leading service providers also differentiate themselves through technology. Advanced analytics gives them rapid customer insights, so they can move with unprecedented speed and agility.

Most companies therefore operate in complex, highly unsettled business environments. Customers increasingly dictate the rules. Three-quarters of them, research finds, expect “now” service, within five minutes of making contact online. Similar percentages want a simple experience and use comparison apps when they shop for consumer goods. Moreover, they not only expect providers of services and products to do business on digital platforms but also insist on a “social” experience. They put as much trust in online reviews as in personal recommendations (Exhibit 1). Many businesses already nderstand that it’s no longer enough to compete on products or services. In our work, we find that how an organization delivers for customers is beginning to be as important as what it delivers. Companies that make it easier for them to connect in what they regard as a positive way tend to make inroads on the competition. The best will adapt their processes, cultures, and mind-sets to manage the entire customer experience skillfully—which benefits not only consumers but also employees and the bottom line.But other companies, for many reasons, fail to deliver a compelling customer experience.

A lot of managers think about it in very narrow terms, focusing only on individual topics and forgetting about the overall system for delivering value. Some excel at specific kinds of interactions with customers but ignore the fuller experience, both before and after the purchase. Others concentrate on fixing their operations but forget to look at them through the eyes of the customer. And most organizations still tend to underestimate the importance of the internal cultural changes needed to achieve and sustain a new approach to the customer experience. The list goes on.